Apple forms team to explore App Store changes: Report

It's a sign that the company knows the crowded App Store has become harder for customers to navigateBloomberg | April 16, 2016, 11:01 IST

File photoBy Adam Satariano and Alex Webb

Apple Inc. has constructed a secret team to explore changes to the App Store, including a new strategy for charging developers to have their apps more prominently displayed, according to people familiar with the plans.

Among the ideas being pursued, Apple is considering paid search, a Google-like model in which companies would pay to have their app shown at the top of search results based on what a customer is seeking. For instance, a game developer could pay to have its program shown when somebody looks for "football game," "word puzzle" or "blackjack."

Paid search, which Google turned into a multi billion-dollar business, would give Apple a new way to make money from the App Store. The growing marketing budgets of app developers such as "Clash of Clans" maker Supercell Oy have proven to be lucrative sources of revenue for Internet companies, including Facebook Inc. and Twitter Inc.

About 100 employees are working on the project, including many engineers from Apple’s advertising group iAd that’s being scaled back, said the people, who asked not to be identified because the plans are private. The effort is being spearheaded by Apple Vice President Todd Teresi, who led iAd.

If Apple goes through with the idea, "it’s going to be huge," said Krishna Subramanian, the co-founder of Captiv8, which helps brands market using social media. "Anything that you can do to help drive more awareness to your app, to get organic downloads, is critical."

In addition to paid search, the team is trying to improve the way customers browse in the App Store. Apple declined to comment.Apple currently gets about 30 percent of each app sale, which is part of the $20 billion in services revenue the company generated last fiscal year.